** OT to Mel, re Roth IRA **
Here is what First Trust's newsletter says:
Roth IRAs
Beginning January 1, 1998, First Trust will offer the new Roth IRA (named after its Senate-sponser) that allows investments and earnings to accumulate tax free! Because there is no up-front deduction, qualified withdrawals are distributed free of taxation (and in most cases, free of penalty) when held in the account at least 5 years. Contributions are allowed for individuals (even past age 70 1/2) as long as the taxpayer's AGI is below $160,000 (joint) or $110,000 (single). Allowed contributions begin to phase out for those with AGI of $150,000 (joint) and $95,000 (single). Unlike any other type of IRA, there are no minimum distribution requirements.
Rollovers from a traditional IRA to a Roth IRA are permitted if the taxpayer's AGI is less than $100,000 (joint or single). Eligible distributions that are rolled into a Roth IRA will be favorably taxed (ratably, over a four year period) if the rollover transaction is completed before January 1, 1999. The 10% premature distribution penalty is also waived for amounts rolled into a Roth IRA.
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